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GM pact cuts pay in half for those in noncore jobs

NEW YORK - General Motors Corp. has the right to shift a fourth of its union labor force to lower-paying jobs by 2011 under a tentative contract reached last week with the United Auto Workers.

GM and the union agreed to label "in excess of 16,766" jobs as "noncore" positions that pay about half the earnings of 73,500 current UAW members at the largest US automaker, according to the agreement. The jobs won't offer a full pension or retiree healthcare.

The contract addresses GM chief executive Rick Wagoner's demand that the union help close a $25-to-$30 gap in hourly US labor costs with Toyota Motor Corp. and Honda Motor Co. Hourly pay and benefits for noncore jobs will be about $28, compared with $51 for current UAW workers, people familiar with the plan have said.

"These rates get them very close to the Toyota labor costs," said Kristin Dziczek, an analyst at the Center for Automotive Research in Ann Arbor, Mich. "It really sets up a match of the titans" between GM and Toyota.

The "noncore" ranks may swell, Dziczek said. The four-year contract identifies 3,126 jobs now done by outside suppliers that may be brought back to GM under the lower pay scale.

GM spokesman Dan Flores and UAW spokesman Roger Kerson had no comment on the contract, which is up for ratification this week and next by UAW locals.

Depending on how the supplier jobs are returned to GM and then reclassified, lower-paid workers could range from 23 to 31 percent of GM's UAW total in four years, Dziczek said.

Current workers in jobs classified as noncore won't have their pay cut, UAW president Ron Gettelfinger said last week. Including those whose compensation is reduced, GM's workforce would stay at its current level for the life of the contract, Gettelfinger has said.

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